Divorce is undoubtedly one of the most challenging personal events in one’s life. It can significantly impact various aspects of your life, including your real estate dealings. Keep your real estate attorney informed if you are contemplating or undergoing a divorce in Iowa. Here are five compelling reasons why:
Decree Dictates Division of Real Estate:
A divorce decree typically includes explicit directions on dividing marital property, including real estate. This decree may stipulate a variety of conditions, influencing the future actions needed from your real estate attorney.
The decree may directly state which spouse will retain ownership of the real estate. If the divorce decree assigns the property to one spouse, the other spouse may need to sign a Quit Claim deed to relinquish their rights.
The court may order a tenants-in-common arrangement, with each spouse owning 50% of the property. This arrangement is typically used when the spouses need to keep the property but can’t or don’t want to sell it right away.
Your real estate attorney can use the divorce decree to strategize and manage potential complications in your real estate transactions.
Multifaceted Impact of Divorce on Real Estate Transactions:
Divorce is a complex process that can significantly affect your real estate holdings and transactions. Child support, alimony, property settlement, and ownership of real estate can all impact property transactions.
Property Settlements
Property settlements can also affect real estate transactions. One spouse may buy out the other’s interest in the marital home, which may require refinancing. Or, if the home is sold, your attorney needs to understand the settlement agreement to help.
Child Support
Child support or alimony can affect an individual’s financial ability to maintain a current home or purchase a new one. For example, a spouse who must pay child support or alimony may struggle to qualify for a mortgage.
How do they impact title?
Child support, spousal support, and property settlement orders are all liens against real estate. Support orders are liens for 10 years from each due date, and property settlement orders are liens for the entire amount owed. These payments must be current before a home sale can move forward. There are simple ways to resolve these liens, so inform your real estate attorney about a pending or final divorce proceeding as early as possible.
Moreover, changes in the ownership of real estate during a divorce can directly impact property transactions. If a petition or stipulation is filed during the divorce process, it can cause a cloud on the title. This information will be shown in an abstract of title, a comprehensive, chronological summary of the property’s title records. Your real estate attorney needs to know this information to clear the title and ensure a smooth transaction.
Your real estate attorney can prepare for the multifaceted impacts of your divorce, streamlining your property transaction and avoiding legal obstacles.
Impact on Mortgage Loans and Refinancing Requirements:
Divorce can significantly impact existing mortgages, especially if both spouses are on the loan. Divorce decrees often require one spouse to refinance to remove the other spouse’s name within a certain time frame.
This requirement can protect the spouse who is not keeping the property from future liability for the mortgage debt. It can also allow the spouse who is keeping the property to fully control it. However, it’s important to remember that refinancing usually depends on the individual spouse’s creditworthiness and income. If a spouse has lower income or poor credit, they might face difficulties in securing a refinance.
Tell your real estate attorney about your divorce decree’s refinancing requirement. They can help you refinance, identify potential issues early, and propose solutions.
Protection of Your Rights:
Having an attorney who is well-versed in your personal circumstances can help protect your rights during the divorce process. This is particularly true for high-value marital assets like a family home or investment properties. An attorney can provide advice on protecting these assets, ensuring that your interests are safeguarded.
Communicate openly with your legal advisors during a divorce. Your Iowa real estate attorney will provide the best advice and service possible if they have the full picture.
